In 2024, I sold all my shares in a commodity ETF (BOIL) that was organized as a PTP so I got a K-1 package and a 1099-B from my broker. I did a lot of research here to figure out how to correctly enter this sale into Turbotax Online, especially the cost basis correction on the 1099-B and avoid the double counting of the capital gains. Posts by @nexchap and @Mike9241 were helpful, but I would still like some help to check my work.
I filed an extension to file my 2024 taxes so I'm under pressure to get this done.
Here are some screenshots from parts of my K-1:
For the TurboTax online K-1 interview,
Describe the partnership: This is a publicly traded partnership, Partnership ended in 2024.
Describe partnership disposal: Complete disposition
Tell us about your sale: Sold partnership interest
Enter Sales Dates: Purchase Date VARIOUS, Sales Date 3/18/2024. I had purchased shares in this ETF over multiple lots at different times in 2022 and 2023.
Entered the box values shown in my K-1 part III and K-3
For this second "Describe the partnership" screen, do I have the correct boxes checked below? I never made any money on this PTP and have had losses for a sale of some shares in 2022 and also having large partnership losses in 2023. Do I need to keep track of the partnership losses in this ETF? I never made any profit either from the sale of shares in the ETF or from the partnership's activities. I assume that these losses can be carried over from year to year, but I heard that I can't really uses these losses to offset gains for my real estate income or capital gains from selling off stocks.
I left the sale information blank since I had no ordinary gains or 1250 gains. Per advice found elsewhere on this forum, I'll report the capital loss from the sale of the shares on the 1099-B from the broker with an modified cost basis.
Next, I'll describe how I adjusted the cost basis on the 1099-B from the broker (Fidelity). This is where it gets complicated. I had purchased shares in the ETF over multiple lots. For the sale, some were considered as short-term transactions and the rest were long-term. Also Fidelity thinks it knows the correct cost basis for this PTP and reported the basis to the IRS (box A, D checked)
1. figure out the correct cost basis for all the short term and long term sales.
From the K-1 Sales schedule, the adjusted cost basis in box 6 is 7389.
LT adjusted cost basis = 7389 * 0.46 = 3398.94
ST adjusted cost basis = 7389 * 0.54 = 3390.06
2. 1099-B cost basis adjustment
Based on the K-1 sales schedule and my calculations, the ST cost basis = 3398.94.
But my 1099-B short term transactions show two lots and I decided to allocate a portion of the ST cost basis according to the lot size. (See screenshots below)
short term lot 1, 100.209 shares, adjusted cost basis = 3398.94 x (100.209 / (100.209 + 99.76)) = 1999.51
short term lot 2, 99.76 shares, adjust cost basis = 3398.94 x (99.76 / (100.209 + 99.76)) = 1990.55
By doing this, the total adjusted cost basis for all the short term lots equals the 3398.94 figure that I calculated from the K-1 schedule.
In a same manner, I allocated the LT cost basis of 3390.06 across all the share lots for the long term transactions.
For the first short term lot1, I entered the adjusted cost basis in Turbotax online by checking the box "the cost basis is incorrect or missing". Am I correct to click on this box, despite Fidelity reporting the broker's cost basis to the IRS?
Thank you for making it to the end!
